Press Room

FT. LAUDERDALE, Fla. , May 3, 2001 — Spherion Corporation (NYSE: SFN) today announced operating results for first quarter ended March 30, 2001. Net income for the first quarter was $10.4 million and earnings per share (EPS) from operations were $0.18, excluding restructuring and other charges, unrealized gains on foreign currency transactions related to the sale of its Michael Page subsidiary and the cumulative effect of an accounting change, further described under “Restructuring and other items” in this press release. This compares with $0.37 per share for the same period in 2000. Cash EPS from operations (EPS plus after-tax intangible amortization) for the first quarter of 2001 were $0.34 versus $0.51 in 2000. Earnings (loss) per share for the first quarters of 2001and 2000 were ($0.34) and $0.37, respectively. Total revenue for the first quarter was $854.6 million, a decrease of 10.8% from the same period of the prior year and 4.9% from the fourth quarter. Exclusive of revenue generated by Michael Page in both periods, first quarter 2001 revenue declined 8.2% from fourth quarter 2000 to $675.0 million.

Segment Review—First Quarter 2001

Commercial Staffing Commercial Staffing reported revenue of $349.5 million for the first quarter of 2001, a decline of 19.7% compared with the same period in 2000. On a sequential quarter basis, revenue declined 12.1%. The segment’s gross profit and operating margins were 21.1% and 2.3%, respectively, compared with gross profit and operating margins of 21.1% and 4.1% reported a year ago. Cinda Hallman, newly appointed president and CEO of Spherion commented, “First quarter commercial staffing revenue was significantly impacted by the economic slowdown. Although gross profit margins remained relatively consistent, the lower revenue level resulted in a lower absolute contribution to the bottom line. We are pleased with our gross profit margins in a very competitive market, but we expect to face continued downward pressure on revenue due to the economy over the next few quarters. With our field leadership team having acted quickly to identify opportunities for office consolidation and other expense reductions, we must now ensure that the benefits from this restructuring are realized to help restore operating margins.”

Information Technology Information Technology revenue was $170.2 million in the first quarter of 2001, a decline of 14.6% and 3.0% compared with the first and fourth quarters of 2000, respectively. Gross profit margins for the first quarter 2001 improved to 31.4% when compared with the fourth quarter 2000 of 30.9% but declined when compared with the 32.0% gross profit margin reported a year ago. The first quarter segment operating margin was 3.7% in the current year compared with 4.8% in both first and fourth quarters of 2000. Hallman continued, “Our technology unit did a great job to increase gross profit margins in the first quarter compared with last quarter, but we saw solutions based billable headcount decline throughout the quarter. Therefore, aggressive expense management continues to be a priority.”

Professional Services Professional Services, excluding Michael Page, which consists primarily of U.S. based professional recruiting and outsourcing, reported revenue for the quarter of $155.3 million, a decrease of 7.5% from the first quarter of 2000 and 4.1% on a sequential quarter basis. Gross profit and segment operating margins during the first quarter of 2001 were 35.4% and 3.0%, respectively compared with 38.4% and 8.3%, respectively, in first quarter 2000. The Company divested 100% of its interest in Michael Page effective April 2, 2001 and will therefore include the operating results of Michael Page for the first quarter of 2001 in its consolidated financial statements. The transaction resulted in net, after-tax proceeds to the Company of approximately $710 million and an after-tax gain of approximately $190 million, which will be recorded in the second quarter of 2001.

Restructuring and other items During the first quarter of 2001, the Company recorded restructuring and other charges in the aggregate of $63.6 million. This amount includes $33.7 million of non-cash goodwill impairment charges and restructuring costs of $23.0 million related to staff reductions and office consolidations and $6.9 million of severance due to the Company’s former CEO. In anticipation of the sale of its Michael Page subsidiary, the Company entered into certain foreign currency transactions that resulted in an unrealized gain of $11.4 million recorded in the first quarter of 2001, which will be realized as part of the gain on the transaction recorded in the second quarter. Also, effective January 1, 2001 the Company adopted FAS 133, Accounting for Derivative Instruments and Hedging Activities, resulting in a $1.1 million after-tax charge for the cumulative effect of adoption. Spherion repurchased 3.6 million shares of its common stock at an average price of $9.66 per share during the first quarter.

Outlook First quarter 2001 earnings per share from operations, excluding the results of Michael Page and the charges and gains previously described, were approximately $0.02. Cash EPS, on the same basis, was approximately $0.13. Based on the restructuring actions taken in the first quarter of 2001and assuming no further deterioration in the economy, the Company currently estimates that second quarter earnings per share from operations will be between $0.05 and $0.10. Full-year earnings per share from operations, including the results of Michael Page for the first quarter, are expected to be between $0.40 and $0.55. Due to the impact of non-deductible goodwill amortization and a lower earnings base, the Company estimates its effective tax rate will increase to approximately 50% for the remainder of 2001, from approximately 40.5% in 2000. Hallman concluded, “Currently Spherion is operating in a mixed economic environment with limited visibility in predicting future improvements. However, our obligation, regardless of the economic conditions, is to focus on execution, creating a level of operational excellence that will allow us to restore revenue and profitability growth, as market conditions improve. Accordingly, we will over the next 60-90 days, review each area of our operation to ensure that their priorities are aligned with delivering on this goal.” Spherion Corporation is a human capital management company, founded in 1946, with company headquarters in Ft. Lauderdale, Florida . As workforce architects, Spherion helps companies efficiently deploy human capital to improve their bottom line. Spherion offers a unique model of consulting, diagnosing and implementing solutions in the areas of staffing, recruiting, technology and outsourcing. Visit the Company’s Web site at www.spherion.com. This release contains statements that are forward looking in nature and, accordingly, are subject to risks and uncertainties. Factors that could cause future results to differ from current expectations include risks associated with acquisitions, competition, changing market and economic conditions, currency fluctuations and additional factors discussed in this release and in Spherion’s filings with the Securities and Exchange Commission. The Company’s actual results may differ materially from any projections contained in this release.